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Daily FX Market Commentary 17/02/2016

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The USD

Yesterday gave the USD an opportunity to really batter the GBP, due to the disappointing UK inflation information that we received in the morning.

The data opened the way for the USD to press 1.4% against the UK currency, moving from 1.4500 to 1.4300.

As I write this morning, the rate is now languishing at the 1.4265 mark but I still think there is a case for the rate to really burst in either direction.

There are refreshed concerns over the strength of the US economy – in the form of negative forecasts for profits and growth – and analysts have been talking about their doubts that we will see the interest rate rises promised for the year.

Really, the best course of action is to protect your profit margins or what you have now through hedging. I can walk you through this easy and commonly used tool.

The EUR

There is a lack of economic information expected today from the Eurozone. Though, like the USD, the EUR surged against the GBP on the back of the same disappointing UK inflation news.

The move was almost as succinct, moving from 1.2980 all the way down to 1.2830 or a loss of 1.16% during the course of the day. This morning we are even further down at 1.2770.

The GBP

We will see some important information from the UK this morning as the employment information is released. This is forecast to show that unemployment has reduced during the last period, this is positive news for the UK but not the only factor at play today.

Another really important piece of information will accompany the unemployment data in the form of a survery that measures the change in wages in the UK. This is forecast for a reduction, and in my opinion, will be seen as the more important of the two news items this morning.

There’s a stronger than not chance, in my opinion, that we could see another day of steady losses. Get in touch if you have an invoice to settle to get the best of the day.